Reviews directions to Counsel at the last meeting
for preparation of amendments. Explains HB 2001-2 amendments (EXHIBIT A).

069

Jim Voytko

Executive Director, PERS.States he will not indicate to the Board in the future they
have the opportunity to credit above eight percent.Explains why.

089

Chair Knopp

Acknowledges comments of Voytko are accurate.

Voytko

Advises committee that Johnson, Heynderickx, and he
are in agreement.Explains future
actions of the actuary.

106

Rep. Richardson

Asks if it is correct that the projections are based
on 40 years.

Voytko

Responds affirmatively.

Rep. Richardson

Asks if this amendment provides for those years when
the projection is not for eight percent.

Voytko

Comments on requirements of the Board to set aside
funds and the challenge is for the staff and Board to determine the amount
for the reserve.

133

Chair Knopp

Asks if Weyand can explain the differences between
the types of funds (EXHIBIT B).

Chair Knopp

Asks if this will be about an $80 million funding need
for school districts.

Dallas Weyand

Legislative Fiscal Office.Responds affirmatively and states they expect the school
districts to come to the legislature for those funds.

165

Chair Knopp

Asks how much of a problem it would be for PERS to
determine what portion of the $80 million is for each school district.

Voytko

Responds that the schools are pooled and PERS’
knowledge is limited; it is probably not something PERS staff can produce in
the appropriate timeframe.

Chair Knopp

Asks how much staff time is needed.

Voytko

States they will attempt to do it but they do not
have comfort in committing to two weeks.

Chair Knopp

Comments that he supports updating the PERS computer
system to provide more information.

Voytko

Explains what is needed to run figures on school
districts.

229

Rep. Richardson

Asks if the present unfunded deficit is about $17
billion.

Voytko

Responds it changes every day; it was $14.8 billion
as of December 31, 2002.

Rep. Richardson

Asks what the deficit might be currently.

Voytko

Comments that if the assumed rate is lowered to 7.5
percent, it means that from this point forward they expect one-half percent
return on the assets.Explains that
the funding stream must be replaced by some other funding stream.The only funding scheme that can be
changed is employer rates; those would go up.Suggests the committee may want to look into “partitioning” to
try to avoid that consequence by keeping the assumed rate and the investments
that justify it at one level for most parts of the fund but not necessarily
for some of the liability-generating parts of the fund which they would
invest differently which would produce a lower expected rate of return.That would avoid the spike up in employer
rates.

Steve Delaney

PERS Legislative Liaison.Explains the $17 billion figure.

Voytko

Explains further the $17 billion.

290

Brian Delashmutt

PERS Coalition.Reports that after consultation, they think the HB 2001-2 amendments
are a good improvement and they are in support of the bill.Comments on the Legislative Fiscal
Statement (EXHIBIT B).

310

Chair Knopp

Asks if Delashmutt believes further amendments will
not be needed on the Senate side.

Delashmutt

Responds he is comfortable with the bill in its
current form, and Hartman is comfortable with it.Does not anticipate any changes in the Senate.

Chair Knopp

Comments on agreements and moving forward.

338

J. L. Wilson

National Federation of Independent Businesses,
Oregon (NFIB).States that employers
are clear and adamant that PERS is most important and they endorse HB 2001
with the amendments.

Joe Swinehart

Associated Oregon Industries (AOI).Speaks in support of HB 2001.States that AOI also supports the
Governor’s stand on mortality tables and changing the Board membership.

Russ Walker

Northwest Director of Citizens for Sound
Economy.States they are pleased with
the efforts to reform PERS.Supports
HB 2001 with the amendments and also supports the Governor’s comments earlier
today.

431

Rep. Brown

MOTION:Moves to ADOPT HB 2001-2 amendments dated
1/23/03.

VOTE:7-0-0

Chair
Knopp

Hearing no
objection, declares the motion CARRIED.

469

Rep.
Macpherson

MOTION:Moves HB 2001 to the floor with a DO PASS
AS AMENDED recommendation.

Rep. Brown

Comments
on meaningful efforts of those involved in passage of the bill and on the
entire issue of PERS reform.

Chair
Knopp

Expresses
his appreciation for efforts and cooperation in working on PERS reform and
states that he wants to make sure everyone is included in the discussions.

VOTE:7-0-0

AYE:In a roll call vote, all members
present vote Aye.

518

Chair
Knopp

The motion
CARRIES.

Rep. Knopp
will lead discussion on the Floor.

TAPE 8, A

040

Chair Knopp

Closes the work session on HB 2001 and opens a public
hearing on HB 2004.

Asks what would happen to the line (EXHIBIT C, page 5) under the
Governor’s proposal.

Voytko

Explains the effects on the graph (EXHBIIT C, page 5) and states they
want to let those employees who plan to retire on February 1 this year
understand the status of the pending legislation and discussions.

275

Rep. Nolan

Asks if there is anything to prevent issuing a check
under the proposed scenario of January 1, 2003 immediate and full
implementation, then going back and adjusting that for members so it does not
create an inflated contract right.

Voytko

Responds that the payment date is an administrative
line in the sand; it is less a contract right.It is a commitment on the part of the member to go into
retirement.

Voytko

Comments on estimated payments.

321

Rep. Nolan

Asks how many people are in this window

Responds there are 1,463.

334

Rep. Richardson

Asks how many mortality tables there are to choose
from.

Voytko

Explains how the actuary chooses from the various
mortality tables.

Rep. Richardson

Asks what the differences are.

Voytko

Comments he believes the differences will be in the
populations studied. States he does not believe their tables would be
different than those used by an insurance company.

Rep. Richardson

Requests a copy of tables being used by PERS.

415

Rep. Macpherson

Comments he believes the decision of the PERS Board
to go with the green line (EXHIBIT C,
page 5) was based, at least in part, on advice received from the
Department of Justice about the issue of tax qualification.Asks if Voytko can speak to the issue.

TAPE 7, B

Voytko

Explains desire of PERS Board to maintain the
accrued benefits, and requirements under ERISA.

050

Chair Knopp

Closes public hearing on HB 2004 and opens a public
hearing on HB 2005.

Comments on Governor’s desire for makeup of the
Board.States that the amendment
needs to be drafted.Adds that others
are free to make recommendations.

Rep. Macpherson

Notes there would be a position on the Board for labor
and for management.Suggests those members
hold the same fiduciary duties as those from the general public.Asks that the chair include that in the
amendment draft.

Chair Knopp

Responds he would be happy to accomplish Rep.
Macpherson’s suggestion if it is legal.

125

Chair Knopp

Comments he would like to go to work session on HB
2005 next Tuesday.Asks that members
get their ideas together to prevent having conflicting amendments.

NOTE:The list of PERS Board members requested
by the committee at the previous meeting is submitted by PERS staff and is
hereby made a part of these minutes (EXHIBIT F).

146

Chair Knopp

Closes the public hearing on HB 2005.States he does not believe it is necessary
to open hearings on the other items on the agenda.